Emory Report
December 3, 2007
Volume 60, Number 13

For a continually updated list of Emory statements and press releases, as well as links to major news coverage of Grady and its funding crisis, see www.emory.edu/grady. Check back frequently for updates.
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December 3, 2007
Vote on hospital governance gets mixed reaction from stakeholders

By ron sauder

The leaders of Emory and Morehouse have reacted cautiously to a six-page resolution passed Monday, Nov. 26, by the Fulton-DeKalb Hospital Authority, in which the governing board of Grady Memorial Hospital sets forth its terms for adopting the governance changes that many have advocated as the first step to a financial turnaround.

A recommendation that the Authority, appointed by elected officials, follow the lead of other public hospitals in the state by establishing an independent 501 (c) (3) corporation to run Grady was one of the key findings of the blue-ribbon, Greater Grady Task Force, which was commissioned earlier this year by the Metro Atlanta Chamber of Commerce at the Authority’s request.

By a unanimous vote, the Authority approved the governance change to a nonprofit model but linked it to a number of pre-conditions, including:

• A written pledge by the business and philanthropic communities to invest $200 million in Grady, including $50 million due when the lease to the hospital is signed over to the new board by Dec. 31.

• A written pledge by the business and philanthropic communities to raise an additional $100 million in private support over the next three years.

• A written commitment by the governor, the lieutenant governor and the speaker of the Georgia House to generate $30 million a year in new state support for Grady.

• A commitment by the Fulton and DeKalb County commissions to back the issuance of $200 million in new bonds for Grady.

• A commitment by the Emory and Morehouse schools of medicine, which supply virtually all of the doctors at Grady, to maintain their medical residency programs at their current levels; to restructure the approximately $63 million in debt that Grady owes them for services already rendered; and to renegotiate their contracts with the hospital.

Immediate reaction from state leaders was negative, with Gov. Sonny Perdue declaring that he had no intention of signing a document binding the state to make annual appropriations, and Speaker of the House Glenn Richardson saying through a spokesperson that the state could not be “manipulated or coerced” by the hospital authority. Both officials did hold out hope of providing more funding for Grady through state support of trauma care next year.

In a joint statement, President Jim Wagner and Morehouse President John Maupin said:

“We commend the Fulton-DeKalb Hospital Authority for taking a critical first step on the road to Grady's recovery. We stand ready to work with the new board to achieve our shared goal of a thriving Grady Hospital that serves the health needs of Georgia, including training a quarter of the state's future physicians.”
However, they added, “There are many specific provisions in the Authority's resolution which will require careful examination by the medical schools as well as other interested parties.”

The FDHA vote followed a well-publicized street-side rally in support of “saving Grady” by scores of white-coated Emory and Morehouse faculty physicians, residents and medical students.

On Nov. 16, more than 280 Emory and Morehouse doctors signed an open letter to community and state leaders appealing for reorganization of the hospital’s governance and adequate funding of the hospital from all sources.

“For over a century, Grady has been a beacon of hope, caring and discovery in the heart of Georgia,” the doctors wrote. “It is vital to the state’s health and economy. We love Grady and want to continue caring for patients here. We appeal to you, our neighbors and friends, to help us revitalize and sustain one of the South’s great hospitals.”

Earlier in the month, Maupin and Wagner sent a joint letter to Pamela Stephenson, the chairperson of the FDHA, warning her that they are concerned about the impact of Grady’s ongoing budget uncertainty on patient care, recruitment and retention of faculty, and recruitment of residents — newly-minted MDs who pursue graduate training in medical specialties. Emory and Morehouse, like medical schools across the country, are currently in the midst of recruiting prospective residents for next year under the terms of the National Resident Matching Program.

"Even as the hospital authority continues its deliberations," Wagner and Maupin wrote on Nov. 8, "Emory and Morehouse are compelled to explore alternative venues for our programs in the event those deliberations are unsuccessful. The process of reviewing alternatives is already under way, so that we might be in a position to begin redeployment as necessary in the new year."

They continued, "We remain cautiously optimistic that we will be able to preserve our historic and productive relationship that has benefited thousands of patients, the counties and the state as a whole."